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Bahamas Regulator Holds $3.5 Billion in FTX Customer Assets

by Arnab Shome
  • The cryptocurrencies were transferred to regulator-controlled wallets on 12 November.
  • The Bahamas is also investigating FTX for criminal conduct.
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On Thursday, the Bahamian Securities Commission revealed its control over more than $3.5 billion worth of cryptocurrencies that belong to FTX customers. The Bahamas regulator obtained these cryptocurrencies with an order from the country's Supreme Court.

Bahamas Regulator Safekeeping $3.5B FTX Customer Assets

The regulator highlighted that it would continue to hold on to the crypto assets until the order of the Supreme Court comes through to return them to creditors and customers of the collapsed cryptocurrency exchange.

"The digital assets transferred on 12 November 2022 to digital wallets under the exclusive control [of] the Commission are being held by the Commission on a temporary basis, until such time as The Bahamas Supreme Court directs the Commission to deliver them to the customers and creditors who own them [or to the administrator of the liquidation]," the official press release stated.

FTX Operated from The Bahamas

Sam Bankman-Fried and his top associates operated FTX from the Bahamas headquarters. However, the bankruptcy proceedings of FTX, Alameda Research, and over 130 other affiliates were filed in the United States.

The Bahamas financial market regulator obtained control over the customer assets held by the local FTX entity on 12 November following the bankruptcy filing of FTX and its affiliates. However, the regulator insists that a cyber attack on the collapsed exchange that resulted in the theft of at least $372 million worth of cryptocurrencies prompted its decision to get a hold of the FTX customer funds for safekeeping.

"...the Commission determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM to the prejudice of its customers and creditors. As a result, in the exercise of its regulatory powers, the Commission requested and obtained a Court order to safeguard the digital assets," the Bahamas regulator added.

Additionally, the announcement highlighted that neither Bankman-Fried nor FTX's Co-Founder and former CTO Gary Wang now has access to these customer funds.

FTX's Super Bowl Ad with Comedian Larry David

Earlier, the Bahamian Securities Commission refuted FTX's claims that it ordered the cryptocurrency exchange to prioritize the withdrawals of Bahamas-based clients.

Meanwhile, the Bahamas' authorities have opened civil and criminal investigations against the conduct of FTX. On top of that, the Bahamas police arrested Bankman-Fried on the island, but that was after the commencement of criminal proceedings against him in the US. He has now been extradited to the US and is out on a $250 million controversial bail bond.

On Thursday, the Bahamian Securities Commission revealed its control over more than $3.5 billion worth of cryptocurrencies that belong to FTX customers. The Bahamas regulator obtained these cryptocurrencies with an order from the country's Supreme Court.

Bahamas Regulator Safekeeping $3.5B FTX Customer Assets

The regulator highlighted that it would continue to hold on to the crypto assets until the order of the Supreme Court comes through to return them to creditors and customers of the collapsed cryptocurrency exchange.

"The digital assets transferred on 12 November 2022 to digital wallets under the exclusive control [of] the Commission are being held by the Commission on a temporary basis, until such time as The Bahamas Supreme Court directs the Commission to deliver them to the customers and creditors who own them [or to the administrator of the liquidation]," the official press release stated.

FTX Operated from The Bahamas

Sam Bankman-Fried and his top associates operated FTX from the Bahamas headquarters. However, the bankruptcy proceedings of FTX, Alameda Research, and over 130 other affiliates were filed in the United States.

The Bahamas financial market regulator obtained control over the customer assets held by the local FTX entity on 12 November following the bankruptcy filing of FTX and its affiliates. However, the regulator insists that a cyber attack on the collapsed exchange that resulted in the theft of at least $372 million worth of cryptocurrencies prompted its decision to get a hold of the FTX customer funds for safekeeping.

"...the Commission determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM to the prejudice of its customers and creditors. As a result, in the exercise of its regulatory powers, the Commission requested and obtained a Court order to safeguard the digital assets," the Bahamas regulator added.

Additionally, the announcement highlighted that neither Bankman-Fried nor FTX's Co-Founder and former CTO Gary Wang now has access to these customer funds.

FTX's Super Bowl Ad with Comedian Larry David

Earlier, the Bahamian Securities Commission refuted FTX's claims that it ordered the cryptocurrency exchange to prioritize the withdrawals of Bahamas-based clients.

Meanwhile, the Bahamas' authorities have opened civil and criminal investigations against the conduct of FTX. On top of that, the Bahamas police arrested Bankman-Fried on the island, but that was after the commencement of criminal proceedings against him in the US. He has now been extradited to the US and is out on a $250 million controversial bail bond.

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